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Factors to Note Ahead of EPAM Systems' (EPAM) Q3 Earnings
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EPAM Systems (EPAM - Free Report) is scheduled to report third-quarter 2022 results on Nov 3.
In the last reported quarter, the company delivered an earnings surprise of 39.2%. EPAM surpassed the Zacks Consensus Estimate in the trailing four quarters, the average surprise being 23.1%.
For the third quarter, the company estimates reporting GAAP revenues of at least $1.21 billion, suggesting year-over-year growth of at least 22%. The Zacks Consensus Estimate for third-quarter revenues is pegged at $1.22 billion, suggesting growth of 23.6% from the year-ago reported figure.
EPAM projects non-GAAP earnings of at least $2.48 per share for the to-be-reported quarter. The consensus mark for earnings stands at $2.52 per share, indicating an increase of 4.1% from the $2.42 reported in the year-ago period.
EPAM’s third-quarter performance is likely to have benefited from the strong demand for its services, driven by accelerated digital modernization across several industries in a continued response to economic changes post-COVID-19.
Furthermore, acquisitions over the past 12 months, including S4N, Emakina Group, Optiva Media and ENGINIETY, are likely to have contributed to the company’s top line in the to-be-reported quarter. In the third quarter, EPAM expects revenues of 4% from acquisitions. Management anticipates the non-GAAP operating margin to be 15-16%.
However, unfavorable currency exchange rates are likely to have hurt the top line in the third quarter. EPAM forecasts foreign currency translation to have a negative impact of 4% on total third-quarter revenues.
Additionally, the company’s third-quarter performance is likely to have been impacted by the discontinuation of its business in Russia following the Kremlin forces’ invasion of Ukraine. The company had significant exposure in the region, with most of its delivery centers in Central and Eastern Europe (“CEE”), now diversified across other regions.
In the third quarter of 2021, revenues from CEE were $45 million (accounting for 4.5% of total revenues).
In fiscal 2021, EPAM generated $168 million of revenues from CEE. However, the ongoing conflict is likely to have hurt the company’s revenues and profitability from this region. Our estimates suggest that the region will generate $30.5 million in revenues and contribute 2.5% to the company’s overall top line.
What Our Model Unveils
Our proven model does not conclusively predict an earnings beat for EPAM this season. The combination of a positive Earnings ESP and Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. However, that’s not the case here.
Though EPAM currently carries a Zacks Rank of #2, it has an Earnings ESP of -0.32%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks With the Favorable Combination
Per our model, Fortinet (FTNT - Free Report) , Baidu (BIDU - Free Report) and CDW Corporation (CDW - Free Report) have the right combination of elements to post an earnings beat in their upcoming releases.
Fortinet is slated to report third-quarter 2022 results on Nov 2. The company carries a Zacks Rank #2 and has an Earnings ESP of +2.44% at present. Fortinet’s earnings beat the Zacks Consensus Estimate in the trailing four quarters, the average surprise being 10.3%. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for quarterly earnings is pegged at 27 cents per share, suggesting a year-over-year improvement of 35%. FTNT’s quarterly revenues are estimated to increase 29.5% year over year to $1.12 billion.
Baidu currently carries a Zacks Rank #2 and has an Earnings ESP of +0.82%. The company is expected to report its third-quarter 2022 results on Nov 16. Baidu’s earnings beat the Zacks Consensus Estimate in the preceding four quarters, the average surprise being 58.1%.
The Zacks Consensus Estimate for Baidu’s third-quarter earnings stands at $2.44 per share, indicating a year-over-year improvement of 7%. BIDU is estimated to report revenues of $4.74 billion, which suggests a decline of 4.3% from the year-ago quarter.
CDW carries a Zacks Rank #3 and has an Earnings ESP of +0.31%. The company is scheduled to report third-quarter 2022 results on Nov 2. CDW’s earnings surpassed the Zacks Consensus Estimate in the trailing four quarters, the average surprise being 6.8%.
The Zacks Consensus Estimate for CDW’s third-quarter earnings is pegged at $2.52 per share, indicating a year-over-year increase of 18.3%. The consensus mark for revenues stands at $6.21 billion, suggesting a year-over-year increase of 17.2%.
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Factors to Note Ahead of EPAM Systems' (EPAM) Q3 Earnings
EPAM Systems (EPAM - Free Report) is scheduled to report third-quarter 2022 results on Nov 3.
In the last reported quarter, the company delivered an earnings surprise of 39.2%. EPAM surpassed the Zacks Consensus Estimate in the trailing four quarters, the average surprise being 23.1%.
For the third quarter, the company estimates reporting GAAP revenues of at least $1.21 billion, suggesting year-over-year growth of at least 22%. The Zacks Consensus Estimate for third-quarter revenues is pegged at $1.22 billion, suggesting growth of 23.6% from the year-ago reported figure.
EPAM projects non-GAAP earnings of at least $2.48 per share for the to-be-reported quarter. The consensus mark for earnings stands at $2.52 per share, indicating an increase of 4.1% from the $2.42 reported in the year-ago period.
EPAM Systems, Inc. Price and EPS Surprise
EPAM Systems, Inc. price-eps-surprise | EPAM Systems, Inc. Quote
Factors to Consider
EPAM’s third-quarter performance is likely to have benefited from the strong demand for its services, driven by accelerated digital modernization across several industries in a continued response to economic changes post-COVID-19.
Furthermore, acquisitions over the past 12 months, including S4N, Emakina Group, Optiva Media and ENGINIETY, are likely to have contributed to the company’s top line in the to-be-reported quarter. In the third quarter, EPAM expects revenues of 4% from acquisitions. Management anticipates the non-GAAP operating margin to be 15-16%.
However, unfavorable currency exchange rates are likely to have hurt the top line in the third quarter. EPAM forecasts foreign currency translation to have a negative impact of 4% on total third-quarter revenues.
Additionally, the company’s third-quarter performance is likely to have been impacted by the discontinuation of its business in Russia following the Kremlin forces’ invasion of Ukraine. The company had significant exposure in the region, with most of its delivery centers in Central and Eastern Europe (“CEE”), now diversified across other regions.
In the third quarter of 2021, revenues from CEE were $45 million (accounting for 4.5% of total revenues).
In fiscal 2021, EPAM generated $168 million of revenues from CEE. However, the ongoing conflict is likely to have hurt the company’s revenues and profitability from this region. Our estimates suggest that the region will generate $30.5 million in revenues and contribute 2.5% to the company’s overall top line.
What Our Model Unveils
Our proven model does not conclusively predict an earnings beat for EPAM this season. The combination of a positive Earnings ESP and Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. However, that’s not the case here.
Though EPAM currently carries a Zacks Rank of #2, it has an Earnings ESP of -0.32%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks With the Favorable Combination
Per our model, Fortinet (FTNT - Free Report) , Baidu (BIDU - Free Report) and CDW Corporation (CDW - Free Report) have the right combination of elements to post an earnings beat in their upcoming releases.
Fortinet is slated to report third-quarter 2022 results on Nov 2. The company carries a Zacks Rank #2 and has an Earnings ESP of +2.44% at present. Fortinet’s earnings beat the Zacks Consensus Estimate in the trailing four quarters, the average surprise being 10.3%. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for quarterly earnings is pegged at 27 cents per share, suggesting a year-over-year improvement of 35%. FTNT’s quarterly revenues are estimated to increase 29.5% year over year to $1.12 billion.
Baidu currently carries a Zacks Rank #2 and has an Earnings ESP of +0.82%. The company is expected to report its third-quarter 2022 results on Nov 16. Baidu’s earnings beat the Zacks Consensus Estimate in the preceding four quarters, the average surprise being 58.1%.
The Zacks Consensus Estimate for Baidu’s third-quarter earnings stands at $2.44 per share, indicating a year-over-year improvement of 7%. BIDU is estimated to report revenues of $4.74 billion, which suggests a decline of 4.3% from the year-ago quarter.
CDW carries a Zacks Rank #3 and has an Earnings ESP of +0.31%. The company is scheduled to report third-quarter 2022 results on Nov 2. CDW’s earnings surpassed the Zacks Consensus Estimate in the trailing four quarters, the average surprise being 6.8%.
The Zacks Consensus Estimate for CDW’s third-quarter earnings is pegged at $2.52 per share, indicating a year-over-year increase of 18.3%. The consensus mark for revenues stands at $6.21 billion, suggesting a year-over-year increase of 17.2%.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.